Middlesex University
Financial Statements 2015/16
21. Provisions for liabilities
Consolidated and University
Obligation to fund deficit on LGPS Pension £000
At 1 August 2015 Utilised in year
Additions in 2015/16 At 31 July 2016
LGPS deficit (see note 30)
The obligation to fund the past deficit on the Universitys’ Local Government Pension Scheme (LGPS) arises from the contractual obligation with the pension scheme for total payments relating to benefits arising from past performance. Management have assessed future employees within the LGPS scheme and salary payment over the period of the contracted obligation in assessing the value of this provision.
Pension enhancements
A pension provision in respect of pension enhancements payable on behalf of staff who took early retirement during the 1990s. Currently there are 179 people in the scheme. This provision will be utilised over the period of retirement. The provision is based upon a full actuarial valuation at 31 July 2015 by a qualified independent actuary.
The assumptions used by the actuary that comply with FRS102 for calculating the provision for pension enhancements on termination at 31 July 2016 are as follows:
Financial assumptions: Discount rate for liabilities
Retail price inflation (RPI increases) Consumer price inflation (CPI increases) – Pension increase rate
Consolidated 3.7%
2.9% 1.9%
Mortality assumptions: The post retirement mortality tables adopted for current pensioners are the S1PA tables.
Restructuring provision
The restructuring provision is an estimated liability from the agreement to offer staff voluntary redundancy or be subject to redundancy where activities have been re-organised or discontinued as a result of restructuring.
The amounts provided include the final settlement of unfunded pension costs of former staff specified in the University’s voluntary redundancy scheme and the estimated future costs of lump sum redundancy payments and unfunded pensions payable to staff who have agreed terms at 31 July 2016.
It is estimated that the provision will be fully utilised in the income and expenditure account in 2016/17 dependent upon the agreed departure date of the relevant employees.
Onerous contract provision
The cost of an onerous contract relating to parts of the New Southgate campus, where the cost of meeting the existing lease obligations exceed the economic benefits expected to be received under the lease. The provision represents the lease period up to 7 June 2020.
99,349 –
29,242 128,591 Pension
Enhancements on Termination £000
6,197 (502) 149
5,844 Total
Pensions Provisions £000
105,546 (502)
29,391 134,435
Restructuring Provision £000
364
(285) 283 362
Onerous Contract Provision £000
4,609
(1,021) 185
3,773
Total Other
Provisions £000
4,973
(1,306) 468
4,135
64
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